Rupiah Strengthens by 0.25% This Morning, US Dollar Drops to Rp17,705
The rupiah exchange rate successfully opened stronger against the US dollar in this morning’s trading. The Garuda currency found room to rebound as the US dollar index underwent a correction.
According to Refinitiv data, at the start of trading on Thursday (3/9/2026), the rupiah appreciated by 0.25% to the position of Rp17,705/US$.
This strengthening reverses the depreciation seen during Wednesday’s (2/9/2026) trading, when the rupiah closed down 0.31% at the level of Rp17,765/US$.
Meanwhile, the US dollar index (DXY), which measures the strength of the greenback against six major world currencies, was observed to have weakened by 0.08% to 99.502 as of 0.90:00 WIB.
US dollar dynamics in the global market are expected to continue influencing rupiah movements today. Despite the correction in morning trading, the greenback had previously touched its highest position in two weeks.
The dollar received support after conflicts between the US and Iran intensified again. This escalation drove up oil prices while increasing concerns regarding the impact of surging energy costs on inflation and the global economy.
The US dollar tends to benefit when oil prices rise because the US economy is considered less vulnerable to energy shocks compared to several other advanced nations. This condition encourages market participants to shift funds towards the dollar as a safe-haven asset.
Dollar strength is also supported by diverging monetary policy directions among advanced nations. The European Central Bank is expected to be nearing the end of its interest rate hike cycle, whereas the Federal Reserve (The Fed) still faces the possibility of continuing policy tightening.
Markets are now pricing in a 68% chance of a Fed rate hike in September, up from approximately 40% the previous week, according to CME FedWatch. Expectations of higher US interest rates could increase the attractiveness of dollar-denominated assets and limit the rupiah’s upside potential.
US 10-year government bond yields also recently rose to 4.8182%, the highest position since November 2023. High yields make US financial instruments increasingly attractive to global investors.
However, bond selling triggered by concerns over US inflation and fiscal conditions could also limit the dollar’s gains. Rising debt and persistently high price pressures are beginning to raise doubts regarding the long-term attractiveness of US assets.
The Governor of Bank Indonesia (BI) for the 2026-2031 period, Destry Damayanti, acknowledged that the global economy remains in a ‘higher for longer’ phase. Interest rates, inflation, and bond yields in advanced economies are expected to remain high for longer than previously anticipated.
“This is consistent with our observations and our latest assessment. We are indeed facing a ‘higher for longer’ situation. Therefore, bond yields are high, inflation is also high in advanced countries, and interest rates remain high,” said Destry after being sworn in as BI Governor at the Supreme Court, Jakarta, on Wednesday (2/9/2026).
According to Destry, these global conditions have the potential to exert pressure on emerging markets, including Indonesia. Developments in global interest rates and bond yields will be one of the considerations for BI in formulating domestic policy.
“This is certainly something we will anticipate when we formulate domestic policy. Therefore, global factors will significantly influence much of our background in creating domestic policy,” she stated.
High levels of global uncertainty mean that stability remains the primary focus for BI, particularly in maintaining the rupiah exchange rate, inflation, and the financial system as the foundation for economic growth.